A year ago we published an article in The Whisper titled Please Jurors, Check Your iPhone With The Bailiff (Vol. 7, Issue 2.) The article discussed the increasingly frequent problem of jurors' use of the Internet to do their own research and the use of social media sites such as Facebook and Twitter to communicate with each other and the world outside of the courtroom regarding the trials in which they serve. The temptation of a sitting juror to do her own research, or to discuss the case with other jurors or outsiders, has always been there; it is just that the advent of the digital age has made the ability to succumb to temptation so much easier. Clearly, courts have taken notice of the problem. Our article last year discussed the nature of the problem and what you, the lawyer, could do to learn of and handle the problem when it occurs. This article will in turn discuss what courts and legislatures around the country have done, and to suggest what more should be done to combat the problem at its source.

In the past year, there have been countless stories of jurors tweeting, posting to Facebook, blogging, or doing internet research during an ongoing trial. In a recent criminal case in California the jury was excused for a Mardsen hearing, which is when a defendant requests a new court-appointed attorney based upon a claim of ineffective assistance of counsel. During the hearing, which must be held outside the presence of the jurors, several jurors used a cell phone to Google the meaning of the hearing. The judge found out and was forced to declare a mistrial. Before releasing the jury, the judge reprimanded the jury and told them the consequences of their actions – that the State would have to pay for a new trial, and that the defendant, who may in fact be innocent, would have to spend the next few weeks in jail awaiting his new trial. Thus, the judge advised, the State incurred substantial funds and a man lost his liberty, all because the jurors spent less than five minutes on Google during a trial. Had the jury been better warned, with an explanation of potential risk, the jury may not have committed the misconduct.

Another example is that of Seth Rogovoy, a Massachusetts juror who was dismissed from a trial in February 2011 for his tweeting during his service. The tweets included a post which stated: "I am in contempt of court, de facto if not de jure" and "Sucks that you can't tweet from the jury box. What's the fun in that?" These tweets show that Mr. Rogovoy both understood that he was not allowed to make the posts and the potential consequence to himself, yet he did so anyway. After being dismissed by the judge, Mr. Rogovoy stated: "I never mentioned any of the people: the defendant, the witnesses. I never mentioned the court I was sitting in." In an interview later given to Bob Gardinier, as reported in the February 9, 2011 Albany Times-Union article Rape trial of ex-priest now before jury: Deliberations set to start in case; juror dismissed after using "Twitter," Mr. Rogovoy stated that, given the popularity of social media platforms like Twitter, judges will be forced to confront them in the courtroom. In that respect, Mr. Rogovoy is absolutely correct.

In order to prevent further juror misconduct through the use of social media, legislatures need to make it clear that it will not be tolerated, and courts need to instruct juries specifically on the impropriety of discussing or researching regarding an ongoing trial, why it is improper to discuss or research an ongoing trial, and the consequences to the juror if he or she fails to follow those instructions. This instruction should be made several times throughout the course of a trial, including when candidates are first called for jury duty, before voir dire, at the beginning of trial, before every recess, and before deliberations. The court must then monitor the jurors as best it can, and follow through with the threatened punishment. Most courts are now doing something about the social media, and in fact most of these suggestions are being followed by at least some jurisdictions. However, no jurisdiction has yet put them all together in a comprehensive effort to combat the social media problem. Without a strong message that juror misconduct is impermissible, the problem will only get worse.

More than half the state and federal courts now have jury instructions that at least make a passing mention of the internet when advising jurors or prospective jurors on the prohibition of performing outside research or discussing an ongoing case. This is a good first step, as many of the jurors who have made social media postings in the past have relayed that they did not understand this to be a "discussion" which was prohibited by the rules. For this reason, it is important that the instructions make more than a mere passing reference. Rather, the instructions should be as specific as possible, mentioning sites such as Facebook and Twitter (or whatever the prevalent form or social media of the day happens to be). At least then, the rule itself will be clear to the jurors.

Additionally, the most effective jury instruction not only gives the rule, but also explains the reasons behind the rule. While lawyers understand that some evidence is inadmissible for one reason or another and will not be known to the jury, many laypersons have a different view. They see lawyers and judges as keeping information from them that they need to know. Thus, not only are they curious, but many believe that they must know all the facts in order to be the best juror they can be. It is also important, as many model instructions now realize, to give the jury the reasons so that they understand that it is important that they follow the rules. Just as important is to advise the jury of the consequences to the courts and parties if they do not follow the rules, and the likelihood of a mistrial.

Often these instructions are repeated in one form or another several times throughout the trial. This, coupled with a recitation of the policy reasons underlying the instruction, will provide the jury with a constant reminder of the prohibition and sound basis for not falling to temptation. While it may seem repetitive, the ease with which a person in today's world can pull out their cell phone and record a status update which can jeopardize the entire trial necessitates the constant reminder as seen in the examples above.

In San Francisco County, in response to a jury pool of over 600 that was dismissed in 2009 following the realization that they had all researched a high-profile case prior to voir dire, the court takes a more aggressive approach. Prospective juries are given a questionnaire with a cover sheet that states in part:

You are ordered not to discuss this case with anyone; do not allow anyone to discuss the case with you. The only information you may tell anyone is that you are in a jury pool for a trial and the time requirements of that trial. You are also ordered not to read, listen to, or watch any news, Internet, or other media accounts of this case, past or present. You may not do research about any issues involved in the case. You may not blog, Tweet, or use the Internet to obtain or share information. (CCP §1209(a)(10))

In addition to the instruction on prohibition, there must be consequences for a juror's willful disobedience of the rules. There are many individual instances where a judge has held a juror in contempt of court for violating the prohibition on research and discussion, and held hearings. This may need to be a more frequent and publicized occurrence to stem the growing problem. California recently passed a new law, AB 141, which went into effect on January 1, 2012, that makes a willful violation of the prohibition on research or use of social media punishable by not only civil contempt, but also makes it a misdemeanor. See Cal. Civ. Proc. Code § 1209(a)(6); Cal. Penal Code § 166(a)(6). In addition, the bill amends current law and requires that the jury be specifically instructed, before trial and before recesses, on the prohibition of research or dissemination of information, in all forms including electronic and wireless. See Cal. Civ. Proc. Code § 611; Cal. Penal Code § 1122. If anything, the bill does not go far enough. For instance, it could require offending jurors to pay for the consequences of their action, including the re-trial of the case if necessary.

While several judges in California and in other jurisdictions have taken it upon themselves to hold a juror in contempt for prohibited conduct, including the use of social media or performing internet research, the California Legislature's codification of this violation as not only civil contempt, but also a misdemeanor, is a step in the right direction. However, while California's new law requires the judge to advise juries regarding the prohibition on internet research and use of social media, it does not require the judge to instruct the jurors on the consequences of their actions if they fail to follow the rules. This too is important. While advising the jury of the reasons behind the rule appeals to their sense of civic duty – the carrot – advising the jury of the consequences of failing to adhere to the instruction lets the jury know that there will be real punishment – the stick. Both the carrot and the stick are necessary in order to have the best chance of strict adherence to the rules.

Finally, not only is it important that there be a law in place for handling a juror's violation and that the jury be advised of that law. The law must be enforced, possibly by the district attorneys as a misdemeanor rather than the judge as civil contempt. The instruction could also contain a request that the jurors report to the court if they know or suspect that one of their co-jurors may be violating any of these orders, which would in essence be self-enforcement.

Other courts have experimented with the prohibition of cell phones in the courthouse for everyone, or at least for jurors. Indiana, for instance, requires the bailiff to collect and store computers, cell phones and other electronic communications devices prior to deliberations. This rule was implemented after the Indiana Supreme Court considered a case wherein a juror took a cell phone call during deliberations. There, the Indiana Supreme Court wrote: "We additionally observe that permitting jurors, other trial participants, and observers to retain or access mobile telephones or other electronic communication devices, while undoubtedly often helpful and convenient, is fraught with significant potential problems impacting the fair administration of justice….The best practice is for trial courts to discourage, restrict, prohibit, or prevent access to mobile electronic communication devices by all persons except officers of the court during all trial proceedings, and particularly by jurors during jury deliberation." Henri v. Curto, 908 N.E.2d 196, 202-203 (Ind. 2009). Although helpful for times when the jurors are actually at the courthouse, this solution may not provide much in the way of curbing the practice of Internet research and social media discussions after hours, unless the jury is sequestered for the entire trial.

Our jury trial system is dependent on the jurors who are privy only to the evidence admissible in court, instructed on the law solely by the judge at the conclusion of the evidence and who have not been predisposed to outside opinions or discussions of the case before deliberation with their fellow jurors. While no solution is perfect, it is clear that courts, legislatures, and lawyers must do more to halt the increasing episodes of juror misconduct.

Tom D'Amato is a shareholder with Murphey, Pearson, Bradley & Feeney in San Francisco. He maintains an active litigation and trial practice in state and federal courts, and in administrative proceedings before regulatory and government agencies. Chief among his areas of practice are professional liability, business disputes, intellectual property, real estate, employment and personal injury. Mr. D'Amato also regularly represents clients in appellate courts.

Adam Koss is an associate with Murphey, Pearson, Bradley & Feeney in San Francisco. Mr. Koss focuses his practice on all phases of litigation, representing clients at mediation, arbitration and through to trial if required. Mr. Koss has an active practice defending professionals and their businesses, specifically in malpractice actions. Although he focuses predominantly on the defense of professionals and businesses, he also represents clients in a variety of other fields, including products liability, employment law, real estate, contract disputes and general negligence.

The smooth transition of NFL jersey production responsibilities from Reebok to Nike hit a snag this week with the filing of a lawsuit by Nike against its rival. Nike filed suit in federal court against Reebok over Reebok’s swift production of Tim Tebow-New York Jets jerseys after Tebow’s trade to the Jets. The trade announcement on March 21st left an extremely tight window of time for Reebok to capitalize on the deal before its contract with the NFL expires on April 1, 2012.  

The U.S. Supreme Court has rejected the federal government’s argument that compliance orders issued by the U.S. Environmental Protection Agency (“EPA”) under the Clean Water Act, 33 U.S.C. §§ 1251 et seq. (the “CWA”), cannot be challenged in court.  In a unanimous opinion issued on March 21, 2012, the Court held that such orders constitute “final agency action” that can be challenged under the Administrative Procedure Act, 5 U.S.C. § 706(2)(a) (the “APA”).  Sackett v. United States Environmental Protection Agency, 566 U.S. ___, No. 10-1062 (Mar. 12, 2012).  In so doing, the Court has weakened one of the favored arrows in the EPA’s enforcement quiver. 

The case arose when Chantell and Mike Sackett bought two-thirds of an acre near Priest Lake, Idaho, intending to build their home there.  The vacant lot is zoned residential and is located in a platted subdivision, with sewer and water hookups.  The lot is separated from the lake by several lots where homes have already been built.  Sackett, slip op. at 3.  The Sacketts applied for and obtained the necessary building permits from the local authorities.  They began preparing the lot to build their home by filling in part of it with dirt and rock.  Id.  Not long after they did so, the EPA hit them with a compliance order. 

As the Court explained, the EPA’s compliance order contained a number of “Findings and Conclusions,” including: that the Sacketts’ property contains “wetlands”; that the property’s wetlands are adjacent to Priest Lake, a “navigable water” under the CWA; and that, by filling in about half an acre of the “wetlands” on their property, the Sacketts had discharged pollutants into waters of the United States in violation of 33 U.S.C. § 1311(a).  Slip op. at 3-4.  The order required the Sacketts to return the property to its prior condition and to seek a wetlands permit – costs that, according to the Sacketts, would add up to tens of thousands of dollars, many times the $23,000 they paid for the property.  Failure to comply with the order could result in fines of up to $75,000 per day – $37,500 for the statutory violation and up to $37,500 for violating the compliance order.  Id. at 2.

The Sacketts tried to challenge the wetlands finding – both before the EPA and in federal court under the APA – but their challenges were rejected.  The district court in Idaho concluded that the CWA precludes judicial review of compliance orders before the EPA has started an enforcement action in federal court, and granted the EPA’s motion to dismiss.  Sackett v. EPA, No. 08-CV-185-N-EJL, 2008 WL 3286801 (D. Idaho Aug. 7, 2008).  The Ninth Circuit affirmed.  Sackett v. EPA, 622 F.3d 1139 (9th Cir. 2010).  In other words, under the lower courts’ decisions, the only way in which the Sacketts could obtain judicial review of the compliance order would be to violate the order, wait for the EPA to sue them, and then raise their arguments in the enforcement action brought by the EPA, while potentially accruing up to $75,000 per day in civil penalties.

In his opinion for a unanimous Court, Justice Scalia set out to explain to the reader “what all the fuss is about.”  After describing the Sacketts’ situation and history – what Justice Scalia referred to as the “strong-arming of regulated parties” by government regulators – the Court held that the Sacketts were entitled to seek relief from the courts. 

The Court explained that the APA has a strong presumption in favor of allowing judicial review of final agency actions.  The Court rejected the EPA’s argument that the lack of an express provision allowing judicial review of administrative compliance orders in the CWA precluded such review, explaining:

[I]f the express provision of judicial review in one section of a long and complicated statute were alone enough to overcome the APA’s presumption of reviewability for all agency action, it would not be much of a presumption at all.

Slip op. at 8.

The Court held that the EPA’s compliance order against the Sacketts met all the requirements for APA judicial review.  First, the Court held that the compliance order was a “final agency action” because it imposed serious legal obligations on the Sacketts, including significant potential double penalties.  Even more importantly, the order represented the “‘consummation’ of the agency’s decisionmaking process” – because the terms of the compliance order were not subject to any further review, as the Sacketts discovered when they unsuccessfully sought a hearing before the EPA.  Slip op. at 5-6.  Second, the order clearly determined the Sacketts’ obligations by ordering them to restore their property to its prior condition.  Finally, the CWA does not expressly preclude review by the courts.  The Court therefore reversed the judgment of the Court of Appeals and remanded for further proceedings.  Id. at 10. 

Justice Ginsburg and Justice Alito filed concurring opinions.  In her one-paragraph concurrence, Justice Ginsburg emphasized that the opinion does not address the question of whether the property owners “could challenge not only the EPA’s authority to regulate their land under the Clean Water Act, but also, at this pre-enforcement stage, the terms and conditions of the compliance order” – a question that is left for another case and another day.

Justice Alito, in contrast, issued a scathing rebuke of the EPA, the CWA, and Congress, stating that “[t]he position taken in this case by the Federal government – a position that the Court now squarely rejects – would have put the property rights of ordinary Americans entirely at the mercy of [EPA] employees.”  Alito, J., concurring op. at 1.  While the Court’s opinion “provides a modest measure of relief” by allowing property owners to challenge the EPA’s jurisdictional determination under the APA, Justice Alito stated that “[r]eal relief requires Congress to do what it should have done in the first place: provide a reasonably clear rule regarding the reach of the Clean Water Act.”  Id. at 2.  Specifically, Judge Alito criticized the EPA’s and Congress’s failure to define what is meant by “the waters of the United States,” leaving this crucial jurisdictional determination to be made “on a case-by-case basis by EPA field staff.”  Id. 

The decision does not reach the merits of the Sacketts’ challenges to the compliance order, nor does it address the Sacketts’ due process argument.  Nonetheless, the decision is significant, and the stakes are high.  While the media has consistently portrayed this case as a battle between property owners as David against the EPA’s Goliath, the opinion also represents a victory for all property owners, including businesses and corporations.  Indeed, General Electric Co. had sought similar relief in a case last year, and filed an amicus brief in support of the Sacketts.  Moreover, the Court’s decision could impact not only CWA enforcement authority, but possibly could also impact review of compliance orders issued under other federal environmental statutes which, like the CWA, do not contain express prohibitions to judicial review.  And, for cases arising out of orders issued pursuant to statutes that do contain an express prohibition against judicial review, the Court may yet decide to go beyond the terms of the statute and the APA and address the due process argument it did not reach in the Sacketts’ case.

Many people will not be shocked by the title of this post.  However, a new report issued by an advocacy group for the U.S. Chamber of Commerce was recently released that was entitled, “The Plaintiffs’ Bar Goes Digital, an Analysis of the Digital Marketing Efforts of Plaintiffs’ Attorneys and Litigation Firms.”  The report found that marketing efforts were being camouflaged as forums or support group sites.   The report estimated that law firms had spent more than $50,000,000 on Google advertising in 2011.  The overwhelming majority of that was spent by Plaintiff’s firms.  However, despite the fact that the amount of spending does not rank with large corporations, it is disproportionate for the size of the industry.  The report is critical of the Plaintiffs’ Bar because of a lack of transparency that many of their sites were actually marketing for law firms.  

The question is hotly debated among law school students, lawyers, judges, commentators, and policy makers: is law school still worth it?  We've all heard the stories of bright, hard-working students who graduate from law school only to be faced with the arduous task of finding a permanent legal job in a struggling economy while shouldering the astronomical burden of $150,000 in student loan debt.  But the bigger questions are:  How did we get here?  And what should we do about it?

According to a study done by the ABA Research Center, in 2008 there were 1,162,124 lawyers in the United States.  David Barnhizer, Redesigning the American Law School, 2010 Mich. St. L. Rev. 249, 276 (2010).  By 2009, that number had climbed to 1,180,386, which means that in the span of one year, 18,262 lawyers joined the profession.  Id.  Of the approximately 1.1 million lawyers in the United States, 400,000 were licensed in the last 10 years.  Id. at 282. 

While law schools continue to turn out legions of graduates, the pool of available jobs for these newly minted attorneys has shrunk.  According to recent data published by the National Association for Legal Career Professionals (NALP), the overall employment rate for new law school graduates in 2010 was 87.6 percent.  NALP, Employment for the Class of 2010 – Selected Findings, available at http://www.nalp.org/uploads/Classof2010 SelectedFindings.pdf.  This number is the lowest it has been since 1996, when the unemployment rate for new law school graduates fell to 87.4 percent.  Id.  A reported 15,000 jobs at large law firms have been cut since 2008.  David Segal, Is Law School a Losing Game?, N.Y. Times, Jan. 8, 2011.

In addition to graduating with fewer future job prospects, many graduates carry with them staggering amounts of debt.  The average tuition at an American public law school is said to have increased by 448 percent between 1987 and 2005.  William S. Howard, The Student Loan Crisis and the Race to Princeton Law School, 7 J. L. Econ. & Pol'y 485, 486 (2011).  Approximately 85 percent of graduates from ABA-accredited law schools carry an average debt load of $98,500.  William D. Henderson and Rachel M. Zahorsky, The Law School Bubble, ABA Journal, Jan. 2012, at 30-35.  By 2020, the Office of Management and Budget estimates that direct loans to students will total $1.8 trillion, and between 2 and 4 percent of that will be for law school graduates.  Id. at 34.

One of the most frequent criticisms of the current version of the American law school model is that in addition to leaving many students without jobs and with enormous debt, it does not adequately prepare them for the practice of law.  Critics argue that while law schools spend three years teaching students archaic principles of law and encouraging heated policy debates, what law schools don't do is teach students how to be practicing lawyers. 

Some have recently proposed that we deregulate legal education by allowing anyone (not just law school graduates) to take the bar exam, arguing that eliminating the requirement of a formal legal education would promote greater efficiency and reduce the problem of law school debt.  See, e.g., George Leef, Allow Anyone to Take the Bar, N.Y. Times, July 25, 2011.  As part of a discussion of this issue in a series posted by the New York Times, George Leef contends that law school is unnecessary because lawyers learn the practical skills they need for their jobs when they begin working, rather than in the academic classes they take in law school.  Id. 

Clifford Winston echoes Mr. Leef's sentiment, contending that "occupational licensure has been costly and ineffective; it misleads consumers about the quality of licensed lawyers and the potential for non-lawyers to provide able assistance."  Clifford Winston, Are Law Schools and Bar Exams Necessary?, N.Y. Times, Oct. 24, 2011.  Mr. Winston argues that eliminating law schools and bar exams would result in reduced legal costs, because non-lawyers would be able to charge less for their services with no student loans hanging over them.  Id.

Another less drastic proposal for change involves changing the law school model to shorten the time spent in classrooms and get more students into the practice of law earlier.  David Lat has proposed a model in which the first two years of law school are used for traditional legal instruction, while the third year is used for apprenticeships.  David Lat, Bring Back Apprenticeships, N.Y. Times, July 25, 2011.  Mr. Lat argues that "[u]nder this system, aspiring lawyers would stop accruing debt and start earning money at an earlier point."  Id.  Law students would gain the practical knowledge their employers want them to have, and employers could train workers to their specific requirements.   Id. 

On the other hand, others argue that shortening or eliminating the law school curriculum – even if it would reduce students' debt burden – would be a mistake.  Kevin Noble Maillard, It's Not a Trade School, N.Y. Times, Sept. 13, 2011.  Kevin Noble Maillard argues that the traditional legal model should be continued because "[i]t prepares people to become leaders in our society, which makes it imperative that they be rigorously trained as thinkers."  Id.

Indeed, many argue that law schools are inherently valuable because they teach students to think like a lawyer.  See, e.g., Geoffrey R. Stone, Learning to Think Like a Lawyer, N.Y. Times, July 15, 2011.  Geoffrey Stone contends that what law schools do best is develop critical analytical skills:  Rather than teaching students to memorize principles of law, law schools teach students how to apply those principles to different fact patterns, so that when they hit the real world they are prepared for anything.  Id.  Additionally, as Leonard Long points out, treating law school as a trade school ignores the fact that not everyone who goes to law school ends up practicing law.  Leonard J. Long, Resisting Anti-Intellectualism and Promoting Legal Literacy, 34 S. Ill. U.L.J. 1, 2 (2009).  Many trained in the legal method often eschew law practice in favor of careers in business, politics, journalism, or academia.  Id.

One proposal that seeks to balance law students' need for increased practical training with the recognition of the inherent value of a formal legal education is the suggestion that all law students participate in some sort of clinical coursework during law school.  See Richard A. Matasar, The Viability of the Law Degree: Cost, Value, and Intrinsic Worth, 96 Iowa L. Rev. 1579, 1612-13 (2011).  Currently, only 3 percent of law schools require students to participate in clinical training.  David Segal, What They Don't Teach Law Students: Lawyering, N.Y. Times, Nov. 19, 2011.  Richard Matasar contends that if all law schools required (or at least strongly encouraged) their students to complete a clinical course of study before graduation, those students would leave law school with more of the practical skills necessary to succeed in a variety of professional legal settings.  Matasar, supra at 1612-13.

Even this proposal, however, has its difficulties.  Mr. Matasar himself acknowledges that requiring each student to take a semester's worth of clinical coursework could end up being an expensive proposition for some law schools, which might need to hire additional faculty and other resources to support the courses.  See id.

Commentators have primarily called upon law schools, regulators, and policy makers to decide upon and implement these institutional changes.  In the end, however, one of the easiest solutions is within the reach of every member of the bar.  Increased mentoring of prospective law school students, including candid discussions about the costs of law school and the outlook for potential job prospects, is something we can all contribute.  For students who carefully consider their reasons for attending law school and who make decisions about their student loans with realistic expectations of their ability to repay them, law school may still be worth it.  As practicing lawyers, it is our responsibility to seek out and mentor these students. 

Carolyn Pratt graduated from the University of North Carolina School of Law in 2008.  After a two-year clerkship at the North Carolina Court of Appeals, Carolyn joined the Wilmington, North Carolina office of Cranfill, Sumner & Hartzog, LLP as a member of the firm's litigation group.

The Supreme Court heard oral argument on February 28, 2012 in Kiobel v. Royal Dutch Petroleum Co., a case raising the controversial issue of corporate liability for alleged violations of international law.

Kiobel is a putative class action in which the plaintiffs, current and former residents of Nigeria, allege that three oil companies aided and abetted the Nigerian government in committing human rights violations in connection with oil exploration activities in Nigeria.  Plaintiffs invoked the Alien Tort Statute (“ATS”), 28 U.S.C. § 1350, as the jurisdictional basis for their U.S. lawsuit against foreign companies for alleged human rights abuses occurring in Africa.  The ATS, although passed by the first Congress in 1789, was first utilized in 1980 by an alien plaintiff seeking a civil remedy for alleged human rights abuses.  The ATS provides as follows: “The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.”    

The Second Circuit dismissed the plaintiffs’ suit, holding that the district court lacked jurisdiction over plaintiffs’ claims against corporations.  The court started with the uncontroversial proposition that the ATS is a jurisdictional statute and does not create any cause of action.  Citing an earlier Supreme Court ATS case, Sosa v. Alvarez-Machain, 542 U.S. 692 (2004), the Second Circuit stated that it must look to “customary international law to determine both whether certain conduct leads to ATS liability and whether the scope of liability under the ATS extends to the defendant being sued.”  After an extensive review of international law, the court could not identify a single instance in which a corporation had ever been subject to any form of liability under the customary international law of human rights.  Thus, the court concluded that imposing liability on corporations for violations of customary international law had not attained a “discernible”, much less the required “universal”, level of acceptance among the nations of the world in their relations with each other.  Therefore, the court held that it lacked subject matter jurisdiction over the plaintiffs’ claims against the oil companies and dismissed the complaint.       

The Supreme Court docket has been extremely active since plaintiffs’ petition was granted in October 2011.  In addition to denying defendant Shell’s conditional cross-petition for writ of certiorari, the Court has seen over 35 amici briefs filed in Kiobel, including a brief by the United States government in support of petitioners-plaintiffs and briefs by the governments of Germany, Great Britain, and the Netherlands in support of respondents. 

The outside interest generated by Kiobel underscores the important ramifications of the Court’s decision on corporate liability, both for U.S. companies with foreign operations, as well as foreign and multinational firms.  But the outcome of the case pivots on a relatively narrow slate of legal issues.  In their merits brief, the petitioners first take the position that the Second Circuit incorrectly characterized the issue of corporate civil liability as an issue of subject matter jurisdiction.  Petitioners go on to argue that under the ATS, analysis of customary international law is necessary to determine whether a particular act constitutes a violation of a substantive international law norm, but that domestic law (which undoubtedly recognizes corporate civil liability) supplies the remedy.  The respondents of course disagree, pointing to the above-quoted excerpt from Sosa as clearly establishing that international law must recognize corporate liability before ATS liability can be imposed. 

From the outset of petitioners’ oral argument, it was apparent that the Court was concerned about the notion of U.S. courts imposing civil liability on foreign companies for foreign conduct.   Counsel for petitioners, Paul Hoffman, uttered two sentences before Justice Kennedy interjected with two statements he challenged Mr. Hoffman to rebut: (1) “International law does not recognize corporate responsibility for the alleged offenses here,” and (2) “No other nation in the world permits its court to exercise universal civil jurisdiction over alleged extraterritorial human rights abuses to which the nation has no connection”.  Justice Alito followed in the same vein shortly thereafter with the observation that “there’s no particular connection between the events here and the United States,” which fed into his later questioning “what business” a case like this one has in the courts of the United States.   Justice Roberts appeared equally concerned about U.S. courts adjudicating the instant dispute, and he questioned whether the Kiobel suit itself contravened international law insofar as it could not have been brought in any other nation.

While the Court kept Mr. Hoffman occupied with the issue of the extraterritorial scope of the ATS, Deputy Solicitor General Edwin S. Kneedler, arguing for the United States, was permitted to address several other arguments in support of petitioners’ position.  Nevertheless, the argument turned back toward broader policy issues, as Justice Kennedy posed a hypothetical to illustrate what he perceived to be the United States’ position:

Suppose an American corporation commits human trafficking with U.S. citizens in the United States. Under your view, the U.S. corporation could be sued in any country in the world, and it would -- and that would have no international consequences. We don't look to the international consequences at all. That's -- that's the view of the Government of the United States, as I understand.

Kathleen M. Sullivan, although peppered with wide-ranging questions from an active bench, was able to consistently return focus to respondents’ position that corporate liability was simply not recognized by customary international law.   Respondents’ argument was summarized succinctly by Ms. Sullivan toward the end of her oral argument:

[T]he ATS has language that says the tort must be committed in violation of the law of nations. So although, Justice Ginsburg, it doesn't specify who may be the defendants, it does point us to the law of nations to figure out what the law of nations thinks about who may be the defendants, and the law of nations is uniform. It rejects corporate liability. It rejects corporate liability.

Counsel for respondents finished her argument by clarifying that respondents did not seek a rule of “corporate impunity”, noting that corporate officers could be liable for human rights violations and that there were other avenues for suits redressing human rights violations, such as under state law or the domestic laws of nations.   

In rebuttal, Mr. Hoffman argued that “international law places no restriction on the way domestic jurisdictions enforce international law”.  However, despite his effort to focus the Court’s attention on domestic law as supplying the remedy for a violation of international law, he found himself answering the same line of questioning that began the argument – why should the courts of the United States entertain a “suit by an . . . alien against another alien for conduct that takes place overseas”?  This fundamental question emerged as perhaps the primary theme of the oral argument.  Whether the justices received a satisfactory answer will likely determine the outcome of the case. Keep an eye on the DRI Court Reporter for a summary of the Court’s decision when it is released.

The entire oral argument transcript can be downloaded from the Supreme Court website here.

Joshua D. Shaw practices law at Turner Padget Graham & Laney P.A. in Columbia, South Carolina.  

On March 31^st of last year, San Francisco Giants fan Brian Stow allegedly was attacked and  sucker-punched by two L.A. Dodgers fans after an opening-day game between the two clubs at Dodgers Stadium.  His head hit the pavement, leaving Stow with a fractured skull and brain trauma.  Doctors placed him in a medically-induced coma for several months.  According to Stow’s attorneys, the attack has left Stow with permanent brain injury and severely limited  movement.  Today, he is wheelchair-bound and reportedly will require 24-hour nursing care for the rest of his life.  Only recently has he begun to write and try to speak.  A former paramedic, he is unable to support himself or his family.

In May, Stow filed suit in Los Angeles Superior Court seeking $50M in damages against the Dodgers, Dodgers owner Frank McCourt, and several others.  Stow asserts that the Dodgers were negligent, among other reasons, for failing to provide adequate security, failing to provide adequate lighting, and promoting a half-off beer sale that promoted violence.  He also claims that the Dodgers fired 300 security staff shortly before the assault, and he submitted sworn declarations from eight other Giants fans alleging that they had difficulty in finding security personnel to respond to threats against them during the game.  He also argues that one of Stow’s assailants was involved in two prior incidents that day and that the Dodgers should have ejected him from the ballpark hours before he attacked Stow.  Many people online report a long-term tolerance by the Dodgers of a significant “thuggish” element at the ballpark. 

 In opposition, the Dodgers have argued that stadium security was at record levels on opening day and that they had no way to anticipate the attack.  Further, they deny any half-off beer promotion.

 In June, the Dodgers filed for bankruptcy in Delaware, resulting in a stay of the L.A. case.  Under a reorganization plan filed by the Dodgers, et al., McCourt and other Dodgers officials would be released from legal liability for any actions they took in their official capacity as team representatives that may have contributed to Stow’s injuries.

On February 3^rd of this year, the Dodgers moved in the Bankruptcy Court for a motion disallowing all of Stow’s claims, arguing that Stow cannot win the L.A. case as a matter of law because Stow cannot prove a link between security issues and the beating.  In response, Stow’s counsel has asked the Bankruptcy Court to yield to Los Angeles Superior Court. 

For several  reasons, the Bankruptcy Court is likely to allow the L.A. suit to run its course:  First, the case has obtained nationwide attention, and federal judges are not immune from media-generated pressure.  If the court stops the L.A. action, some will claim that the court hijacked the jury-trial process.  Second, the Dodgers recently disclosed documents establishing the existence of insurance of over $300M, which is more than enough for a verdict in favor of Stow.  Third, the Dodger bankruptcy is unusual in that the owners will be flush with money after reorganization.  Reports cite many interested buyers, with a predicted sale price as high as $2 billion for the franchise.  Finally, the Dodgers reportedly have admitted that, in all likelihood, all creditors will be paid in full from sale proceeds from the sale.   Bankruptcy judge Kevin Gross already has hinted at the likely outcome, noting that the Dodgers will have a considerable task in convincing him "that there are absolutely, positively no facts that could result in liability under California law."  Hearings on the matter are scheduled for March 7^th and March 21^st.   A hearing regarding the proposed reorganization plan is set for April 13^th, and sale of the franchise is scheduled for April 30^th. 

Bill Staar is a partner in the Boston office of Morrison Mahoney LLP, Chair of DRI's Sports Law & Entertainment Group, and a member of the Sporting Goods Manufacturers Association’s Legal Task Force.  He concentrates in the areas of product liability, construction disputes, toxic torts, and general business litigation. He also is a member of DRI's Product Liability, Commercial Litigation, and Construction Law Committees.

The Supreme Court of the United States will reconsider the issue of affirmative action in higher education for the first time since its 2003 decision in Grutter v. Bollinger.  In Grutter the Court held that, “The Equal Protection Clause does not prohibit the [University of Michigan] Law School’s narrowly tailored use of race in admissions decisions to further a compelling interest in obtaining the educational benefits that flow from a diverse student body.”  Today, the Court agreed to hear the appeal of Abigail Fisher, a white student, who alleges she was denied admission to the University of Texas because of the color of her skin.  At issue in the Fisher case is whether the Court’s decisions interpreting the Equal Protection Clause of the Fourteenth Amendment, including Grutter, permit the University of Texas at Austin’s use of race in undergraduate admissions decisions.

The Texas case will be argued in the fall and the changed makeup of the Supreme Court could foretell a different outcome.  Chiefly, Justice Sandra Day O’Connor, who wrote the majority 5-4 decision, has been replaced by Justice Samuel Alito.  Further, Justice Elena Kagan has been recused from the case.  Her recusal is likely a result of the Justice Department’s participation in the case in the lower courts at the time when she served as solicitor general.

What impact, if any, will the changed makeup up of the Supreme Court have on its decision?  Is there a compelling interest in obtaining educational benefits from a diverse student body?  Could a reversal of the Court’s decision in Grutter result in resegregation in public colleges and universities?

 If you spend some time looking at the statistics, you will see the number of jury trials is swiftly declining.  Many states and organizations have recognized the decline, voicing concerns about the resulting impact on the judicial system, the public and lawyers.  The Florida Bar created a special taskforce, the Special Committee to Study the Decline in Jury Trials (“Committee”), to research and analyze the trend, determine the root cause of the decline and recommend a course of action to the Florida Board of Governors to minimize the impact of this decline.  The Committee issued its final report in December 2011.  The full report is available at floridabar.org by clicking “About the Bar,” followed by “Committees” and then “Special.”

The Committee reviewed, among other published studies, Professor Marc Galanter’s article The Vanishing Trial: An Examination of Trials and Related Matters in Federal and State Courts (1 J. Empirical Legal Studies 459 (2004)).  When you view the statistics, the decline is apparent, and staggering.   For example, in 1962, 11.5% of 50,320 civil federal court dispositions were by trial.  In 2002, there were only 1.8% dispositions by trial, out of 258,876.  In Florida civil cases, 1.6% of total civil cases (155,407) were resolved by jury in 1986.  By 2009, the percentage reduced to .2%, while the number of civil cases increased to 401,463. 

According to the Committee, there are several reasons why jury trials suffered declines.  For civil cases, the rise of alternative dispute resolution mechanisms contributed markedly.  The expense of trials is always another common deterrent.  Another factor is the time it takes to bring a case to trial.  Despite the reduction in number, it was noted that jury trials have become more complex -- longer and more complicated. 

The declines have not been without negative impacts.  With fewer jury trials, fewer people participate in the judicial system as jurors.  Jury service helps educate the public about the justice system.  It is a simple way for the average citizen to play a role in governmental decision making.  If the nearly all disputes are resolved privately, via mediation or arbitration, rather than in an open courtroom, the public’s perception of the justice system will become further skewed.

The decline in jury trials also contributes to reduced funding to the court system, as the decline itself may be viewed as a reason to fund less.  This contributes to a never ending cycle of funding and less independence of the judiciary. 

One of the greatest impacts, however, is the effect on new lawyers.  A lawyer learns best by first-hand practice.  With less opportunity to conduct a trial, lawyers must look to other training which will always be less adequate than the real thing.  The new lawyer ends up feeling uncomfortable and unsure regarding his or her skills.  When the opportunity finally arises, the lawyer may shy away from the experience because he or she simply does not know how to try a case. 

The Committee recommended several measures, including full funding of the courts.  To reduce the impact, the Committee also suggested training and mentoring programs for young lawyers, such as certified legal intern programs or State Attorney/ Public Defender internships.  The Committee further recommended techniques to the bench to more efficiently administer judicial duties, with less cost to litigants, such as streamlining discovery and encouraging the use of expedited jury trials. 

DRI created the Jury Preservation Task Force to examine this federal and state vanishing jury trial phenomenon and report on its findings, which will be published in a future edition of For the Defense.    

Two decisions within the past few days emphasize the limits on class action arbitration waivers, despite recent United States Supreme Court opinions that breathed new life into such provisions.  With these recent decisions, we see courts relying on both federal and state law concepts to invalidate arbitration provisions when the courts conclude that an individual plaintiff could not feasibly pursue arbitration. 

Vindication of Federal Rights.

The Second Circuit visited the issue for the third time in In re American Express Merchants’ Litigation, No. 06-1871-cv (2d Cir. Feb. 1, 2012).  Merchants there are pursuing Sherman Act antitrust claims against American Express, alleging that American Express improperly ties its non-premium credit cards to its premium charge card services.  Because charge card customers are much more desirable from the merchants’ perspective, American Express is able to charge higher processing fees for those transactions.  These plaintiffs allege that American Express forces merchants to also accept its credit cards and to pay higher processing fees for them even though the credit card customers tend to make smaller purchases.

In two earlier opinions, 554 F.3d 300 (2d Cir. 2009) and 634 F.3d 187 (2d Cir. 2011), the Second Circuit held that the arbitration provision in the merchants’ agreements with American Express was unenforceable.  Following the Supreme Court’s opinion in AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011), the Second Circuit asked for supplemental briefing on the topic.  Although Concepcion held that the Federal Arbitration Act preempts state law that imposes particular restrictions on arbitration provisions, the Second Circuit held for a third time that American Express’ arbitration clause is unenforceable because it prevents an aggrieved party from vindicating a federal statutory right.

In this third opinion, the Second Circuit concluded that Supreme Court authority “leaves open the question presented on this appeal: whether a mandatory class action waiver clause is enforceable even if the plaintiffs are able to demonstrate that the practical effect of enforcement would be to preclude their ability to bring federal antitrust claims.”  [Slip Op. at 15]  These plaintiffs satisfied the Second Circuit that they would be precluded from doing so in individual arbitrations because individual damages (a mean of $5,300 and a maximum of $39,000) could not compare to the several hundred thousands of dollars needed for an expert economic analysis of liability and damages.  [Id. at 22]  Thus, “the only economically feasible means for plaintiffs enforcing their statutory rights is via a class action.”  [Id.]  It is not enough that the Clayton Act, 15 U.S.C. § 15, allows for treble damages, attorneys’ fees, and expenses.  A plaintiff must advance the expert costs and then must assume the risk of losing—a significant deterrent to pursuing civil antitrust claims in the court’s mind.  [Id. at 23]

Those plaintiffs relied on an economist’s declaration to establish the likely cost of the necessary analysis.  The court concluded that American Express did not seriously challenge that evidence, which amounted to a concession that an individual plaintiff could not reasonably pursue the claims, whether in court or arbitration.  [Id.]  Just as notable, the court’s “decision in no way relies upon the status of plaintiffs as ‘small’ merchants.  We rely instead on the need for plaintiffs to have the opportunity to vindicate their statutory rights.”  [Id. at 24]

Other courts, particular lower courts in the Second Circuit, have applied this vindication of federal right approach to other statutory claims, such as Title VII employment discrimination suits.  E.g., Chen-Oster v. Goldman, Sachs & Co., 2011 WL 2671813 (S.D.N.Y. July 7, 2011).  With the Second Circuit’s most recent opinion, expect such attacks on arbitration provisions to increase.  It will become more important to challenge the validity of an expert’s assertion of the costs of proceeding with individual arbitration—perhaps to the point of seeking Daubert hearings as part of this process.  While Concepcion and other Supreme Court opinions strengthen defendants’ positions regarding enforcing arbitration provisions, the law is by no means settled. 

Traditional Unconscionability.

On the other side of the country one day earlier, the Northern District of California relied on traditional unconscionability principles to invalidate an arbitration provision in Lau v. Mercedes-Benz USA, LLC, No. CV 11-1940-MEJ (N.D. Cal. Jan. 31, 2012).  That plaintiff bought a luxury car but had numerous mechanical problems with it.  Mercedes sought to compel arbitration when the plaintiff filed suit.  The court found the provision procedurally and substantively unconscionable. 

The contract contained paragraph in capital letters noting the plaintiff’s ability to take the contract to review it and that it contained an arbitration provision on the back.  The arbitration provision had a bold font heading and also was in capital letter.  [Slip Op. at 2]  The court found that procedural unconscionability existed because the dealership presented the contract on a take-it-or-leave-it basis.  It did not matter that the plaintiff signed next to a paragraph mentioning the arbitration provision on the back of the contract.  While the plaintiff negotiated the price (apparently exceeding $100,000), he “was never offered the opportunity to negotiate the inclusion or exclusion of specific pre-printed terms.”  [Id. at 12]

The court found substantive unconscionability because the plaintiff faced substantial expenses in arbitration that do not exist in litigation.  Those expenses include the arbitrator’s hourly fee and the administrative body’s fees.  [Id. at 13]  The provision also was unbalanced because it allowed for a de novo appeal to a three-member panel only if the award was $0 or in excess of $100,000.  The practical effect was to deny plaintiff an appeal right if he recovered less than his full reimbursement right of more than $100,000 but allowed Mercedes to appeal if plaintiff received that full recovery.  Of course, plaintiff also faced advancing more costs if he appealed any award.  [Id. at 14]

Courts frequently undertake this traditional unconscionability analysis to invalidate arbitration provisions.  Plaintiffs’ counsel are being more aggressive in attacking provisions on those grounds, including seeking discovery about a corporation’s experience in arbitration in hopes of showing that the deck is stacked against the consumer.  Thus, it is crucial to take care in drafting an arbitration provision, presenting it to the consumer/employee, and documenting those efforts well before the threat of suit arises.  Consider having the business advance the costs of the arbitration, forgoing seeking its fees (unless the claim against it is frivolous), and ensure that the clause treats the parties equally.