American Jury

Los Angeles Daily Journal, January 3, 2000

by Lawrence C. Waddington

     Although records of early American history describing colonial methods of dispute resolution are ambiguous, the right to jury trial clearly predominated to a people all too familiar with the abuses of governmental power invoked in persecuting political and religious dissent. English monarchs, never reluctant to suppress threats to their authority, eventually surrendered to Parliamentary demands for leverage, and trial by jury became the hallmark of a legal system inherited by the original thirteen colonies. In time, our state and federal governments Constitutionally required trial by jury in criminal and civil cases.

     Yet modern legislation in the United States has attempted to limit the scope of jury trials, i.e., in criminal cases by statutorily reclassifying a "crime" as an "infraction", eliminating the unanimous verdict or reducing the number of jurors necessary for trial. In civil cases, the burgeoning use of mediation, arbitration, "fast track" emphasis on settlement, and court imposition of trial time limits reflect a legislative and judicial impatience with the delay of litigation. Pressure to reduce the use of juries is intense, fueled by apparent public reluctance to serve as jurors, increased complexity of litigation, and a perception of aberrant verdicts. As a result, juries have disappeared in a variety of contexts. The question is: will the trend continue. In 1925, the United States Congress, disturbed by allegations that federal court caseloads were clogging the legal system, held a series of Congressional hearings to evaluate whether an alternative to juries would alleviate the perceived cost and delay of litigation in commercial disputes. Yielding to entreaties of the business community, and mirroring the language of a New York statute, Congress enacted the Federal Arbitration Act (9 U.S.C.1 et. seq.) which adopted arbitration as a method of dispute resolution. If the parties agreed in writing to arbitration, whether before disputes arose or after they matured, jury trials were finessed and the case deflected from litigation. Arbitration clauses are "valid, irrevocable and enforceable" recited the statute (9 U.S.C. 2). Arbitration had come of age for commercial transactions within the ambit of the statute, replacing juries with arbitrators in that context.

     The judicial response to arbitration initially was tepid, possibly replicating the suspicion that English judges had repudiated arbitration as an assault upon their authority (and perhaps their jobs), or evidencing a reluctance to permit non judicial decision making in contractual litigation. But within the next decade, the United States Supreme Court embraced arbitration as an alternative to litigation, confirmed the competency of arbitrators selected by the parties to resolve cases and ultimately enforced application of the FAA in state courts under the doctrine of federal pre emption and the Commerce Clause; Allied Bruce Terminix Cos. v. Dobson (1995) 513 U.S. 265)

     In subsequent decisions, the Justices expanded arbitration to include resolution of securities law violations (Dean Witter Reynolds, Inc. v. Byrd (1984) 470 U.S. 213; RICO (Shearson/American Express, Inc. v. McMahon (1987) 482 U.S. 220; anti trust (Mitsubishi Motors Corp. v. Solar-Chrysler Plymouth Inc. (1985) 473 U.S. 614) and a variety of federal statutory rights (Gilmer v. Interstate/Johnson (1991) 500 U.S. 20. When the California Supreme Court decided the watershed cases of Moncharsh v. Heily & Blaise (1992) 3 Cal.4th 1) and Advanced Micro Devices v. Intel Corp. (1994) 9 Cal.4th 362 endorsing arbitration and authorizing substantial arbitral powers, the legitimacy of arbitration at federal and state levels was complete.

     Expanding on this authority, California courts have also applied the California Arbitration Act (CCP 1280 et. seq.) to a variety of disputes unrelated to commercial contracts; Brookwood v. Bank of America, NTSA (1996) 45 Cal.App.4th 1667 [age discrimination]; Spellman v. Securities Annuities & Insurance Services, Inc. (1992) 8 Cal.App.4th 452 [age discrimination].

     Commercial arbitration has only added to a list of alternative dispute resolution procedures. The California Legislature has mandated judicial arbitration of civil cases valued less than $50,000.00 (CCP 1141.10 et. seq.) and, in Los Angeles County, ordered judicial mediation (CCP 1775). Entertainment industry sponsored arbitration is under the supervision of the Writers Guild and Directors Guild. The National Association of Securities Dealers resolve disputes by arbitration between clients and brokers. Workers Compensation laws have eliminated litigation by employees against employers for work related injuries; Labor Code 27 et. seq). The National Labor Relations Act (29 U.S.C. 151 et. seq.) has provided a mechanism for union employees to seek resolution of work related disputes under the aegis of their unions. The California uninsured motorist law requires arbitration between insured and insurer (Insurance Code 11580.2). Real estate transactions routinely require arbitration between buyer and seller. Administrative agencies have proliferated at state and federal levels and act in a quasi judicial capacity, imposing penalties for violation of state or federal law. And legislative recognition that family law issues are unsuitable for juries is patent.

     In two widely distinct kinds of litigation, class action and small claims, legislative and judicial resolution of disputes adopted different solutions. In the latter, the court hears the case without a jury if the amount in controversy is modest (CCP 116.110). In the former, initiating litigation is presumably a prelude to litigation but frequently is initiated as the basis for settlement rather than trial.

    Have the incremental inroads on jury trial during the last century benefitted the American people in general and litigants in particular? Two hundred years ago, colonists lived in the shadow of tyrannical monarchs who invoked the penal system to suppress political and religious dissent. In 1999, the jury continues to stand as a bulwark against unrestrained government but erosion of the jury has occurred in criminal and civil litigation as the laundry list noted above confirms. The legal landscape has changed dramatically as the United States matured from an agricultural to an urban society, and time has distanced us from memories of royal abuse. Those who challenge the diminishing use of juries argue in civil cases that in an analogous context the individual today stands in a similar position when challenging corporate entities. Critics contend that the disproportionate economic power between an individual and a business entity roughly parallels the original colonial fear of overweening government power that only a jury can equalize. Opponents challenge this assumption, arguing that the very fact litigants are wealthy weighs against them, citing a jury instruction-widely regarded as inefficacious- reminding juries to treat business entities fairly (BAJI 1.03). The implication of the instruction is that business entities operate at a disadvantage in jury trials. Regardless of the merits of each of these arguments, perception is everything.

     Will inroads on the use of juries continue? The NASD recently recommended disapproval of arbitration in securities disputes. Oregon voters rejected an initiative to eliminate unanimous verdicts (in criminal cases). Judicial scrutiny of arbitration clauses is increasing and some courts have noted the importance of informed jury waivers (Prudential Ins. Co. of America v. Lai (9th Cir. 1994) 42 Fed.3d 1299); fairness in drafting arbitration clauses and in the administration of an arbitration; Cole v. Burns Int’l. Security Service (DC Cir. 1997) 105 F.3d 1465, and the requirement of full disclosure of potential conflicts of interest by arbitrators; CCP 1281.9. In most cases, the courts have criticized arbitration clauses in employment cases where the economic imbalance and the frequent absence of a negotiated contract raise the specter of unfairness.

     Perhaps the genius of the American legal system is its ability to adapt to change. The passage of time and a maturing society require constant re examination of appropriate methods of resolving disputes. Colonial abhorrence of untrammeled royal power no longer dominates public consciousness in the United States two hundred years later. Recognition that in discrete contexts, identifying the nature of conflicting interests and balancing the rationale for jury vs. a non jury, the legislature has concluded that society benefits in some categories by offering an alternative to jury trial. Arbitration, fairly administered, can substitute for juries in appropriate cases. The National Labor Relations Act has bought more labor peace in the United States than in any other country. Small claims courts assure immediate access to the courts. Divorcing parties can expect a modicum of privacy even in a public forum.

     Juries remain as a constant reminder that public trials are appropriate and essential, but that in some contexts we can devise reasonable alternatives. In the next century, the public will undoubtedly draw new lines as technology continues to dominate the American economy and international commerce increases. For lawyers, the issue will become where to draw the lines.

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