The jurors found zero dollars in lost sales or lost good will, but they decided to award attorney fees. To calculate attorney fees, they each estimated what they thought the plaintiffs had spent based on their own experience, and they averaged the number to reach a verdict of $19,250,000.
So sayeth the three jurors who filed affidavits after last month's big verdict for Procter & Gamble against Amway distributors who spread a rumor that P&G's logo was a satanic symbol.
The affidavits are attached to the defendants' brief asking for an "immediate inquiry into possible jury misconduct." The jurors shouldn't have awarded attorney fees, the defendants argue, and they shouldn't have averaged their individual damage figures -- an impermissible "quotient verdict" -- for any purpose. Law.com picked up the story, including the defendants' allegation (unsupported by the affidavits so far as I can tell) that the jurors had counted the lawyers at counsel table in calculating fees.
Since it came out, I've heard skilled lawyers talking about the case as an example of the jury system gone wrong. To me it's a better example of how thoroughly lawyers forget how our brains used to work before we were lawyers.
Quotient verdicts happen
If you've seen ten mock juries deliberate, I bet you've seen some form of a quotient or compromise verdict. Why do they do it? Why wouldn't they?
Think about it. Outside the courtroom, we use "quotient verdicts" every day. When you split the difference with the used car salesman to reach a price, you've averaged your two positions to get a fair result -- a quotient verdict. Every "split the difference" settlement agreement is a quotient verdict. When your kid wants to stay up 20 more minutes, you start at five, and you end up at twelve and a half, you've reached a quotient verdict. We've been taught since childhood that finding a midpoint among different positions is a fair and honorable way to reach agreement.
When the Procter & Gamble jurors got to court, nobody told them the rules had changed. The jury instructions contain the following familiar (to us) substantive information on how to reach a verdict:
The verdict must represent the collective judgment of the jury. In order to return a verdict, it is necessary that each juror agree to it. Your verdict must be unanimous.
It is your duty, as jurors, to consult with one another and to deliberate with a view to reaching an agreement if you can do so without violence to individual judgment. Each of you must decide the case for yourself, but do so only after an impartial consideration of the evidence in the case with your fellow jurors. In the course of your deliberations, do not hesitate to re-examine your own views and change your opinion if convinced it is erroneous. But do not surrender your honest conviction as to the weight or effect of evidence solely because of the opinion of your fellow jurors for the mere purpose of returning a unanimous verdict.
You and I read that instruction as prohibiting averaging, majority votes, and so on. But it doesn't say that. A smart, honest juror could easily decide that a time-honored consensus tool like averaging is a fair way to get unanimous agreement "without violence to individual judgment."
Attorney fees are "out of pocket costs," aren't they?
The same is true with attorney fees as damages. Trial lawyers know how many clients, even sophisticated business clients, think there must be a rule that the winning party in a trial gets its fees paid. Why wouldn't jurors believe that too? The Procter & Gamble jurors got two instructions telling them how to calculate damages, of which the entire substantive portion is:
Damages means the amount of money which will reasonably and fairly compensate Procter & Gamble for any losses you find were caused by the Defendants' false message. You should consider the following:
- The loss of Procter & Gamble's goodwill, including injury to its general business reputation:
- The lost profits that Procter & Gamble would have earned if the Defendants had not sent the false message. Lost profits are determined by estimating the amount of product sales that were lost and subtracting the amount of money that would have been spent making and selling the product;
- The expenses of attempting to prevent customers from being deceived;
- The cost of advertising or communications to consumers to correct confusion caused by the false representations;
- The amount of its out-of-pocket expenses incurred to correct the Defendants’ false statements; and
- Any other factors that bear on Procter & Gamble’s actual damages.
* * * *
Any damages you award must have a reasonable basis in the evidence. In determining damages, the difficulty or uncertainty in ascertaining or measuring the precise amount of any damages does not preclude recovery, and the jury should use its best judgment in determining the amount of such damages, if any, based upon the evidence. You may not, however, determine damages by speculation or conjecture.
That doesn't say they can't award attorney fees; in fact, it specifically tells them to award the "out-of-pocket expenses incurred to correct the Defendants’ false statements." And as for relying on their own experience to gauge hourly rates, the instructions said:
You are to consider only the evidence in the case. But in your consideration of the evidence you are not limited to what you see and hear as the witnesses testify. You are permitted to draw, from the facts you find have been proved, such reasonable inferences as seem justified in light of your experience.
Inferences are deductions or conclusions which reason and common sense lead the jury to draw from facts which have been established by the evidence in the case.
Take it to the street
If you don't believe me, try it yourself. Read those instructions, without emphasis, to any ten smart nonlawyers. Tell them P&G didn't prove lost sales, but that the defendants did spread the rumor, and P&G had been litigating this case for more than a decade in its claimed effort to set the record straight. Give your jurors copies of the instructions, and if they have questions, tell them they need to look at the instructions again. (If you want to add extra realism, wait a couple of hours before you tell them.) I'm guessing you'll find at least three who think they can award attorney fees, rely on their own experience to do it, and average their views on what a fair award should be.
There was a curse in the Utah Procter/Amway case, and it wasn't satanic; it was the Curse of Knowledge. To lawyers and judges, it's obvious that attorney fees aren't usually part of damages, that jurors' own experiences with attorney charges aren't evidence, and that jurors aren't supposed to average verdicts. It's so obvious that we forget to tell the jury.
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Related notes:
- In 1997 the New York Times ran a good history of the P&G/Amway satanic rumor saga, two decades old even then. It's subscription only.
- For an overview of the legal landscape faced by the defendants in this motion, a New York University Law Review note by Benjamin Huebner is a great start. In a nutshell, Federal Rule of Evidence 606 restricts the use of juror affidavits to challenge verdicts except as to "(1) whether extraneous prejudicial information was improperly brought to the jury's attention, (2) whether any outside influence was improperly brought to bear upon any juror, or (3) whether there was a mistake in entering the verdict onto the verdict form." In 1987, the Supreme Court held in Tanner v. United States that a predecessor rule kept juror affidavits out when they merely impugned juror conduct, even when that conduct extended to the outright bacchanalia described in the affidavits in that case.
(Photo by Stephanie D. at http://www.flickr.com/photos/strph/127760644/; license details there.)
