March 19, 2015

Taming the Beast: Lessons in Civility from Zenith v. Matsushita

The lack of civility in the nation’s courtrooms has been the subject of numerous writings and presentations. The supreme courts of many states, the federal courts, and the bar associations have all been actively involved in attempts to stem what has been perceived to be the tension between overzealous activity on the part of counsel on one hand, and on the other, the civility called for by the Model Rules of Professional Conduct and needed for cases to be managed in an orderly fashion. This activity has gone beyond rudeness – routinely treating opposing counsel, witnesses, and even the court with disrespect and a lack of courtesy – to filing frivolous pleadings, deliberately misrepresenting facts, refusing to agree to uncontested facts, inflammatory writing in motions and briefs, and consistently contentious discovery disputes. While a judge can deal with some of such conduct through sanctions, over the years many jurists have used other methods to try to maintain civility in the courtroom.

The behind-the-scenes activity at the trial court level in a case that has become famous for the U.S. Supreme Court’s ultimate decision in Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574 (1986), illustrates how one federal judge, in a unique way, fostered and maintained civility in one of this nation’s largest, most complex, and most contentious lawsuits, and in doing so, managed to bring a pair of lawsuits that had been pending for many years to a conclusion. It all began in December 1970 when National Union Electric Corporation (NUE) filed an antitrust suit in the U.S. District Court for the District of New Jersey against seven Japanese television set manufacturers, 12 of their subsidiaries, one Japanese trading company, and one of its subsidiaries. In September 1974, Zenith Radio Corporation filed a largely identical suit in the U.S. District Court for the Eastern District of Pennsylvania against all but two of the defendants originally named by NUE and Motorola, Inc. Sears Roebuck and Co. was added to the Zenith suit later, but not to the NUE suit.

In November 1974, the Judicial Panel on Multi-District Litigation transferred the NUE suit to the Eastern District of Pennsylvania where it first was consolidated with the Zenith case for coordination and pretrial activity and then was consolidated for trial as MDL 189. In November 1977, after the original judge assigned to the case in Philadelphia was elevated to the U.S. Court of Appeals for the Third Circuit, MDL 189 was assigned to the late Judge Edward R. Becker, who had been on the bench in Philadelphia since his appointment in September 1970. He subsequently was appointed to U.S. Court of Appeals for the Third Circuit and served as its Chief Judge from 1998 to 2003.

In capsule form, the plaintiffs’ complaints alleged that the Japanese companies and their U.S. co-conspirators were, and had been, participating in an international conspiracy, with acts going back as early as 1953, to methodically destroy the United States domestic consumer electronic products (CEP) industry by artificially lowering prices on CEPs exported and sold in the U.S domestic market while maintaining high prices on the same CEPs that they sold in the Japanese domestic market. The offenses charged by NUE and Zenith spanned the entire range of the antitrust laws and included a violation of the 1916 Antidumping Act.

It was a case of superlatives, from a trial lawyer’s point of view. A total of 35 million documents were made available on paper by the defendants to the plaintiffs, and the plaintiffs produced several million more. Zenith dedicated an entire empty factory on the west side of Chicago to use as its document depository in order to house every copy of every document that the company generated pursuant to the internal document hold it put in place when it filed suit in 1974. There were over 3,500 docket filings. 100,000 pages of documents were filed in a court-ordered central document depository. The trial in the case was expected to last for at least one year, if it ever progressed to the point where a trial could be scheduled. Toward the end of pretrial discovery, the court pointed out that in addition to all of the documents which had been produced, the depositions completed to date totaled well over 100,000 transcript pages, accompanied by an interrogatory practice which had been voluminous, coming in wave after wave.

However, during the seven years that the suit had been pending in the district courts in New Jersey and Pennsylvania prior to the assignment to Judge Becker, little had been accomplished toward actually getting the case ready to go to trial. This period had been marked by voluminous and contentious discovery disputes, many of which remained unresolved. At one point, one of the plaintiff’s counsel remarked that he had been counting the pages of the transcripts generated by in-court colloquy on such disputes, and that he stopped when he got to 20,000 pages.

It was evident to Judge Becker that he had to gain control of the litigation and quiet what he rightly perceived as courtroom animosity among counsel toward each other and their clients. This was no small task. The court was dealing with a total of 24 defendants and over 150 lawyers and paralegals identified as actively working on the case, which included some Japanese in-house counsel who were embedded with the U.S. attorneys defending their companies. The court was inundated with a plethora of discovery motions and in several months, before discovery closed, had over 50 Rule 37 motions of various descriptions to deal with.

Judge Becker was determined to tame the beast. Upon being assigned the case, one of the first things he did was to host an in-chambers post-Thanksgiving Day get-acquainted meeting in his chambers. To develop collegiality, Judge Becker held most of the court sessions in the well of the courtroom, seated at a table wearing a suit and tie but not a robe. Facing the judge were tables at which the attorneys having business with the court at a given session were seated, with “back bench” attorneys (and those who sought to keep a low profile for their clients) seated on the benches and in the jury box in the courtroom. The proceedings were informal and the court encouraged colloquy. Judge Becker called the attorneys by their first names, though they then appeared in the transcripts as Mr. or Ms. So-and-So, courtesy of the overworked team of court reporters. Formal proceedings were held in a more typical courtroom setting, with Judge Becker, in his robe, on the bench, though he tended to stand up behind his chair and lean on it as the days wore on to ease his aching back.

Judge Becker also proceeded, by trial and error, to find a way to bring order out of chaos in terms of shaping the issues for adjudication by summary judgment or trial. His first attempt, after the post-Thanksgiving get-together, was to order each side to prepare a concise preliminary pretrial statement (PPTS) that would summarize what their respective claims were so that he could get up to speed on the issues of the case. When the plaintiffs filed a PPTS that was 2,250 pages long, the defendants had to file a suitable response. Needless to say, the PPTSs did little to clarify the parties’ claims and could not be used to simplify the case.

Judge Becker then experimented with contention interrogatories to frame the issues. The defendants submitted extensive sets of interrogatories that attempted to pin down exactly what the plaintiffs’ claims were and what evidence they had, among the millions of documents that had been produced, to support their claims. The responses did more to hide the ball rather than reveal it, with references to hundreds or thousands of documents identified by document number attached to most answers. In addition, the interrogatory answers generated more discovery motion practice, and much more heat than light was produced, as Judge Becker set up a schedule that devoted one or more full days per month for argument on discovery and sanctions motions. Counsel labeled these as “plenary sessions.”

Early on, Judge Becker announced that he was going to get the case to trial and that he would enter a pretrial scheduling order which, when completed, would be “cast in stone.” At one of the subsequent plenary sessions, the discussion between counsel concerning the proposed pretrial order became quite heated and, as he adjourned the morning session, Judge Becker said that he felt more like a referee than a judge. During the lunch break, two of the defendants’ lawyers sent a paralegal on a shopping trip from which he returned with a basketball referee’s shirt and a whistle on a lanyard. These were placed on the judge’s table and when he returned to the courtroom, he looked at them with a smile, removed his suit jacket, put on the shirt and blew the whistle. He spent much of that afternoon glancing down at the whistle and smiling as he listened to the continuing argumentation. The judge recognized that he had kindred spirits among counsel and subsequently encouraged off-the-official-record activities in the courtroom. The first of these was in March 1978. That was the turning point in using civility to bring order to the handling of the case.

The defense attorneys who had purchased the referee’s shirt and whistle introduced a traveling award, labeled the Bon Mot Trophy, a pink plastic Mickey Mouse on a walnut pedestal with a plaque that was to be awarded to the best ad-libbed “zinger” spoken by anyone in the courtroom during a day-long plenary session. Judge Becker was the first honoree and at subsequent presentations throughout the next two years, the award traveled on an equal-opportunity basis between plaintiffs’ counsel and defendants’ counsel. Counsel for both sides began to compete for the trophy, and actually started smiling at each other in the process as the months wore on. The court reporters got into the spirit of things and furnished gratis copies of the transcripts of the proceedings when the Bon Mot Trophy was awarded.

The Bon Mot Trophy led to the formation of the SCAMS Committee (for Serbonian Cultural Arts and Marching Society), a small group of defense attorneys who coordinated off-the-official-record events for the host of New York, New Jersey, Philadelphia, Washington, and Chicago firms that represented the plaintiffs and the defendants in the litigation. The term “Serbonian” came from the phrase “armies of the night, marching round and round in a Serbonian bog” from Milton’s Paradise Lost, which was used in a business article to describe the swamp-like IBM antitrust litigation. That article referred to the Japanese CEP antitrust case as the ultimate bog.

Judge Becker’s final effort to get the case to trial was to work with the parties on an extensive case management scheduling pretrial order, which included the requirement that the plaintiffs prepare and file a final pretrial statement (FPS) in which they would have to disclose each fact that they expected to prove at trial plus each item of evidence supporting that fact, with preclusive effect. This was designed to provide the defendants with a recitation of the universe of the plaintiff’s claims and the evidence supporting those claims for purposes of framing summary judgment motions and, if needed, for preparation for trial.

When the order was ready to sign, the SCAMS Committee assisted the court in setting up an in-court signing ceremony. The judge’s clerks arranged for the General Services Administration, which operated the courthouse, to bring in ready-mixed concrete to pour into a form. The SCAMS Committee provided construction jumpsuits for lead counsel, and an official photographer, who recorded Judge Becker using multiple pens to sign Pretrial Order 154 which was then “cast in stone” by inserting a copy of it into the wet cement. After the signing, Judge Becker donned his referee’s shirt and whistle for a photo opportunity, and the SCAMS Committee took over with several presentations.

During the preparation of the scheduling order, SCAMS member Thomas Lynch drafted a “time-out rule” and, with the acquiescence of both sides, presented it to the judge. The court adopted it and added it as an appendix to the case management order reported at Zenith Radio Corp. v. Matsushita Elect. Indus. Co., 478 F. Supp. 889, 959–60 (E.D. Pa. 1979). The time-out rule provided that each side’s Designated Whistler would be issued a whistle from the case liaison logistics committee and, until the court issued a Two-Month Warning, could go to the offices of opposing counsel, blow the whistle three times, and call a one-week time out from the case management schedule. Each side could call up to three time outs before the Two-Month Warning, and one after the Warning if it had one left. Penalties were specified for illegal use of whistle.

As civility set in, counsel for plaintiffs and defendants were inspired to set up the Great Corned Beef Competition. Counsel for plaintiffs submitted their entry from hometown favorite Philadelphia Corned Beef Academy. Counsel for defendants, as the visiting team, submitted their entry from New York’s Wolf’s Delicatessen. Judge Becker conducted a blindfolded taste test in the court, and, perhaps not surprisingly for a Philadelphia native, liked the hometown entry best. Another highlight of the civility program was T-shirts that Judge Becker furnished for all counsel. He had the title of the MDL designation, In re Japanese Electronic Products Antitrust Litigation, translated into Japanese and had it silkscreened on the front of the shirts. Case number MDL 189 was on the back.

The case management pretrial order set a schedule for the defendants to file summary judgment motions after the plaintiffs’ FPS was filed, and for the court to hear argument on whether the key documents cited by the plaintiffs were admissible in evidence, and if so, whether the evidence adduced by the plaintiffs created genuine issues of material fact sufficient to defeat the defendants’ summary judgment motions. The plaintiffs subsequently filed a 17,000-page pretrial statement with 8,500 pages of appendices, and based their case primarily on 250,000 pages of documents, the originals of many of which were in the Japanese language, and affidavits from experts that were supported by those documents, rather than on deposition testimony. Even when the FPS was boiled down to the items that were claimed to have something to do with a particular defendant, as we did, it was a massive undertaking to frame summary judgment motions.

Judge Becker told the parties that he would hear their arguments on the admissibility of the plaintiffs’ key documents, document by document, for as long as it took for him to consider each document the plaintiffs specifically directed him to look at. As it turned out, the hearing in aid of summary judgment lasted for five weeks. Relays of court reporters rushed notes to their transcribers every 15 minutes so that half-day transcripts would be ready at noon and at the end of each day. Counsel for the Japanese defendants had the transcripts summarized twice a day so that the summaries could be cabled to their clients in Japan. There was even a half day of live testimony from one of the plaintiffs’ expert witnesses for the first and only time in the litigation. Since the judge wanted everyone to do his or her utmost to move the case along, sessions would go past 5:00 p.m. as needed, including one session that lasted until midnight.

At the end, Judge Becker held an in-court picnic for the court and counsel. The SCAMS Committee reciprocated by holding an in-court awards ceremony for counsel, with prizes for such things as Best Restaurant Recommendation, a Gold Record awarded by the court reporters (for the attorney who had insisted at the start that everything be on the record), and, of course, a Bionic Judge Award. Then the judge took the case under advisement.

With this evidentiary record, it remained a case of superlatives. Judge Becker’s ruling on summary judgment was actually a series of rulings. First came three opinions on evidentiary issues, each slip opinion 300 pages long: the Public Records decision, 505 F. Supp. 1125 (E.D. Pa. 1980); the Business Records decision, 505 F. Supp. 1190 (E.D. Pa. 1980); and the Expert Witness decision, 505 F. Supp. 1313 (E.D. Pa. 1981). This was capped by a 538-page slip opinion granting summary judgment to the defendants on all of the antitrust claims: 513 F. Supp. 1100 (E.D. Pa. 1981). On appeal to the Third Circuit, oral argument took one-and-a-half-days. As Justice Powell remarked when the case reached the Supreme Court:

Stating the facts of this case is a daunting task. The opinion of the Court of Appeals for the Third Circuit runs to 69 pages; the primary opinion of the District Court is more than three times as long. . . . Two respected District Judges each have authored a number of opinions in this case; the published ones along would fill an entire volume of the Federal Supplement. In addition, the parties have filed a 40-volume appendix in this Court that is said to contain the essence of the evidence on which the District Court and the Court of Appeals based their respective decisions.

What lessons do we draw from this experience? Judge Becker was hardly the first, and certainly will not be the last, judge to be confronted with the prospect of taming an ungovernable piece of litigation. In any high-stakes case, and in many lower-stakes cases as well, the tempers of counsel can all too easily get the better of them. He may have had as difficult a situation to deal with as any judge is ever likely to face, since the case had festered for seven years before it came to him, after passing through several sets of judicial hands. Some judges, confronted with such a case, might bring out the whip and chair to try to tame the beast. Judge Becker, with some help from counsel, came up with a better approach: civility. Encourage counsel to be civil to each other; inject goodwill and humor into the case; take the time to talk things through with counsel; and never lose sight of why the parties are in court in the first place, which is to resolve a dispute.