Terra Extraneus

After my recent experience with finding a felon on a federal court civil jury, I encountered a local judge who related a similar story. In his case, in state court, the jury was seated and voir dire was progressing when an employee in the court clerk’s office noted that the name of a juror seemed familiar. The court clerk looked up the name and discovered that the juror was a felon, by then on probation. The judge was informed, and the judge called the juror and counsel for the parties into chambers with the court reporter and proceeded to inquire on the record, but out of the hearing of the other jurors. After the essential facts were determined and captured on the record, the juror was excused for cause. The juror indicated that he was awaiting a break so that he could approach the court and report himself, but the court clerk staff member with the long memory beat him to the punch.

Court clerk staff members with long memories seem to be the entire system for protecting the sacred jury trial in state court from inadvertently seating a felon.

I have contacted a few jury consultants, and most of them say that they conduct a background search on each potential juror. One even claimed that he conducted criminal background checks. When I inquired about the process used, I came away with the definite impression that this particular jury consultant did not understand the difficulty of conducting a criminal background check.

To conduct a criminal background check on a juror requires certain information that counsel for a litigant is not likely to have or get. Birthdate and social security number are the only data points short of a DNA sample and fingerprints that can effectively identify a United States citizen. With 300 million citizens resulting in a similarity of names, and with the use of error-prone human data entry systems, reliance on names as search parameters is problematic at best. A residential address can sometimes limit point the search in the direction of correctly identifying a person, but not always.

Criminal records are not online for public access in every jurisdiction. They are available online in Oklahoma for state offenders, if you have the correct name. But that does not include federal offenses or offenses committed in other states. Texas is not online. Criminal records online are not always complete. Sometimes only by examining the file in a criminal matter is an exact identification of the accused or the convicted possible. Some relational databases contain entries but not scanned documents. In Oklahoma, only 80% of our court system is online at all.

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Allstate won the battle in a Kentucky civil case last week, but the war continues. In several suits across the country, plaintiffs accuse Allstate of bad faith in how it handles claims, pointing to the now-famous “McKinsey documents” as proof.

However, in the Bluegrass State last week, a jury unanimously denied a $1.4 billion claim against Allstate. The case has some good lessons for attorneys and plaintiffs, even in claims that little resemble the bad-faith insurance lawsuit.

According to the Lexington Herald Leader, a 60-year-old woman sought the whopping $1.4 billion claim from Allstate Insurance Co. after a 1997 automobile accident. The car the woman was in was rear-ended by a truck driven by an Allstate insured. The woman claims permanent neck and back injuries. Allstate paid her $25,000, taking more than two years to settle her claim.

In her subsequent suit against Allstate, the woman’s attorney, J. Dale Golden (Golden & Walters, Lexington, KY) relied heavily on the “McKinsey documents.” McKinsey & Co. is the consulting firm that helped Allstate overhaul its claims-handling process in the 1990s. The documents are 12,500 PowerPoint slides which McKinsey created for Allstate, but which fell into the hands of Santa Fe trial lawyer David Berardinelli a few years ago. In various lawsuits, Allstate is in defiance of a court order in Missouri to produce the documents and has been sanctioned in two others states.

Berardinelli and two other attorneys wrote the 2006 book, From Good Hands to Boxing Gloves: How Allstate Changed Casualty Insurance in America. The book describes how Allstate’s claims-handling process changed under McKinsey & Co.’s guidance. As the title implies, Berardinelli claims McKinsey’s recommendations not only led to big changes at Allstate, but have transformed claims practices across the insurance industry.

As Business Week reports:

The title of Berardinelli’s book is drawn from a McKinsey slide that suggests that Allstate should treat some of its claimants with “boxing gloves,” rather than with its trademark “good hands.” … [T]he documents present a portrait of business strategies that are at odds with the insurer’s carefully cultivated public image. Rather than simply rushing to the scene of an accident and doling out cash, Allstate deploys a variety of systems set in place by McKinsey to make sure it pays the minimum necessary — and it plays hardball with those who seek more.

The Kentucky woman’s claims against Allstate were bolstered by dramatic testimony from a former Allstate claims manager, Debbie Niemer. Testimony from Niemer and others claimed that Allstate:

● Has focused on reducing its payouts on “minor-impact, soft-tissue” injuries, called “MIST cases,” which constitute the majority of injury claims.

● Seeks quick low-dollar settlements. If the injured fails to cooperate, Allstate switches to the alternate strategy of dragging out the claim to drive up litigation costs and force the claimant into submission.

● Has withheld potentially damaging information from claims files.

“If they just wouldn’t have been so consumed by the numbers and allowed the human element,” Niemer said. “If they had allowed the adjusters to see the person, not just the number, it would have been different.”

LESSONS FROM THE JURORS
With a “smoking gun” like the McKinsey docs, plus damaging testimony from one of Allstate’s own, how did Allstate walk away with a unanimous verdict? Jury verdicts are one of the great mysteries of courtroom life, but juror comments provide some clues:

● Golden’s tactic to seek a billion-dollar-plus bonanza backfired. In his closing, Golden told jurors the only way to drive Allstate to repentance was to deliver a massive verdict that would create headlines. “If you award 10, 20 or 30 million dollars in this case, Allstate will be high-fiving all the way to the champagne store,” he said.

One juror said the dollar amount turned her off. “I thought the figure that [the plaintiff] was asking for was outrageous,” said juror Betty Sherwood. “…I thought that when I first went into the trial two weeks ago. … [I]t was so obnoxious of her to ask for so much money.”

● Allstate also earned points when it pointed out that the plaintiff continued to buy her auto insurance from Allstate! We’ve seen this in our practice more than once, for example, when an investor wants to file suit against a brokerage house alleging mismanaged funds, but the investor still has his investments placed with that same house. Juror Kelli Miller said: “If Allstate is such a bad company, why in the world would you keep renewing policies from the very company you are seeking a billion dollars from?”

Golden said he will appeal the verdict. He also said he is considering a class-action suit against Allstate, even though a judge last year denied Golden’s attempt to turn the present case into a class action.

(Hat tip to Jeremy Thurman of Nix & McIntyre for pointing us to the Kentucky case.)

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The number of incarcerated persons in 2006 was 2,245,189 according to a department of the DOJ, found here. At the end of 2005, there were 4,900,000 persons on parole or probation. Of the offenders on probation, half were felons. 94% of parolees had been sentenced to more than a year in prison.

Anyway you look at it, that is at least 3 or 4 out of every 100 persons, 3% to 4%, is a felon in the United States.

Who cares? Trial lawyers had better.

What prevents felons from registering as voters? What prevents felons from being selected for jury duty?

The answer to both questions is: almost nothing.

Federal statutes preclude persons charged (not convicted) or convicted of a crime punishable by more than a year in prison from serving on a jury in a federal court house. But, the law requires the local federal district court to implement the statute. Most local federal district courts in the United States rely upon jury questionnaires to weed out felons. The assumption is that felons will not return the questionnaire and not show up, or will truthfully disclose their status. The assumption is that voter registration systems will, relying on the same approach, weed out felons. Both assumptions are going to be tested as the number of felons in our society escalates at rate of several percentage points per year. This is especially problematic in federal court trials on the civil side wherein voir dire is the exclusive province of the federal judge.

The voir dire problem, too, will aggravate the problem because even more prospective jurors than ever before will have friends or family that have been caught in the judicial machinery. There is no longer a complete consensus in society that predominately governs how people will react to felons.

State and federal court clerks are going to have to be given computer access to the criminal record databases used by law enforcement to track arrests, convictions, paroles and probation. State and federal court clerks are going to have to screen prospective veniremen.

Arbitration forums are going to have to implement criminal record disclosure into their systems, too. While arbitration forums may not have access to criminal record databases in every instance, they will in some instances. For example, nearly all adult criminal convictions are accessible on line to the public in Oklahoma. In some states like Texas, there is much less access publicly available. While it may not be illegal for an arbitrator to be charged with or convicted of a crime involving more than a year of imprisonment, it probably should be. Indeed, some courts would likely impose that standard on arbitrators simply because it is already imposed on federal jurors.

Until better screening tools are available, trial lawyers, when they have sufficient resources, are going to have to screen jurors and arbitrators as best they can. In many cases, however, for the time being, it simply will not be possible.

Some wags will argue that it is not a problem until it happens. Too late, it has happened, and will happen with increasingly regulatory. Mistrial is a pretty expensive remedy.

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The Oklahoma Court of Civil Appeals in Thompson v. Krantz (2006 OK CIV APP 60, at www.oscn.net, Slip Op., May 9, 2006, J. Reif), recently affirmed the decision of a trial court that may have recognized, at least sub silento, that Internet research may be just as persuasive to jurors as news media were once presumed to be.

The juror in question researched the medical questions presented in a case she was hearing and reported some of her findings to other members of the jury panel. The plaintiff won a verdict at trial, but after the trial, discussion among jurors about the Internet research became known, and the defendant sought and received a new trial. The plaintiff could not prove to the appellate court “beyond all reasonable doubt” that the trial court’s decision to grant a new trial was an abuse of discretion, so the order vacating the jury verdict was affirmed.

During my legal career, jurors were not allowed to take notes of proceedings, but that rule has mostly gone by the wayside (although some judges will not allow jurors to take their notes into deliberations). So it is important to note that in this case, the appellate court carefully looked at the potential impact the orally reported Internet research had on jury deliberations before it affirmed the trial court’s decision to treat it as significant in deliberations.

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