Did you ever expect a corporation to have a conscience, when it has no soul to be damned, and no body to be kicked?
—Edward, First Baron Thurlow (1731–1806)
Did you ever expect a corporation to have a conscience, when it has no soul to be damned, and no body to be kicked?
—Edward, First Baron Thurlow (1731–1806)
Decades of research show that juries tend to treat corporate defendants less favorably than individual defendants. See, e.g., Robert J. MacCoun, “Differential Treatment of Corporate Defendants by Juries: An Examination of the ‘Deep-Pockets’ Hypothesis,” 30 Law & Soc’y Rev., No. 1, 121, 140 (1996); John C. Coffee, “No Soul to Damn, No Body to Kick: An Unscandalized Inquiry into the Problem of Corporate Punishment,” 79 Mich. L. Rev. 386 (1981). This “anti-corporate bias” transcends jurors’ sex, age, race, family income, education, employment status, occupation, political ideology, and prior jury experience. Indeed, it seems a distaste for corporations may be the one thing most Americans can agree on. See MacCoun, supra, at 140.
Anti-corporate bias deeply impacts the public perception of financial institutions in particular, with less than 33 percent of people surveyed saying they trust financial institutions. Paola Sapienza & Luigi Zingales, “Chicago Booth/Kellogg School Financial Trust Index reveals highest level of anger about the economy since 2013,” Univ. of Chi. Booth Sch. of Bus. and Nw. Univ. Kellogg Sch. of Mgmt., Feb. 9, 2021. Anti-corporate bias is closely tied to the “deep-pockets hypothesis”—the proposition that juries treat wealthy actors less favorably than poorer actors. MacCoun, supra, at 143.
Anti-corporate bias against financial institutions arises, in large part, from the Enron/WorldCom financial meltdowns of the early 2000s, followed by the 2008 financial crisis. Staff Reports, “Biggest Bank Settlements,” Wall St. J. Thus, for the better part of 20 years, banks and other financial institutions have been front and center in the public’s perception of corporate misconduct.
Financial institutions face a peculiarly complex type of anti-corporate bias. Before their jury service, most jurors will have had a personal interaction with a bank but not a chemical company or a manufacturer, which many jurors may never personally encounter. Thus, even if the case has nothing to do with how banks treat their customers, many jurors’ only touchstone for banks is their experience as a bank customer—and these experiences may impact their decision-making.
There are a variety of steps financial institutions can take—both before a dispute arises and after trial is under way—that can reduce the negative impacts of jurors’ potential anti-corporate bias. In short: Be honest, be sincere, and be human.
A company’s public persona plays a role long before a case is filed or charges are brought. The public perception of the company may influence the nature of the claims brought and the legal strategies the plaintiff may pursue. See Michele DeStefano Beardslee, “Advocacy in the Court of Public Opinion, Installment One: Broadening the Role of Corporate Attorneys,” 22 Geo. J. Legal Ethics 1259, 1270 (2009).
For heavily regulated industries, like the financial industry, it is not uncommon for investigations to follow news of alleged misconduct. Indeed, the spin that the media put on a controversy may limit a company’s defenses or narrow potential avenues for resolution.
Generally, corporations with a positive public persona may fare better in the courtroom. For example, although Microsoft is frequently embroiled in litigation—ranging from antitrust claims to employment disputes—many jurors deliberating these cases are quick to describe the generosity and philanthropy of Bill and Melinda Gates, Microsoft’s founder and former chief executive officer (CEO) and his former wife. Persuasion Strategies, Anti‐Corporate Bias Is a Given, But Corporations Should Not Give Up on the Courtroom 8. This example suggests that, however peripheral the claim may be to the company’s core business, corporations must be proactive about the public relations aspects of their legal controversies.
Of course, not every company is connected to a billionaire philanthropist, but that does not mean that companies should eschew good corporate citizenship. Being a good corporate citizen does not require a billionaire founder. It requires being conscious of the major events and trends taking place in the community.
When a company makes a misstep and a dispute arises, a sincere apology to those affected can help quell the public fallout and reduce the volume of ensuing litigation. For example, the University of Michigan Health System has encouraged its doctors to apologize for mistakes since 2002. That year, the number of malpractice lawsuits and notices of intent to sue the health system fell by about 50 percent, and its legal expenses dropped by two-thirds. See Persuasion Strategies, supra, at 10.
Similarly, when JetBlue encountered inclement weather in February 2007 and kept its airline passengers on the runway for hours without food and with overflowing bathrooms, the company issued a public, robust apology. Public Apology Central, JetBlue Airways. In addition to acknowledging that “we subjected our customers to unacceptable delays, flight cancellations, lost baggage,” and that “hold times at 1-800-JETBLUE were unacceptably long or not even available,” JetBlue crafted and published the “JetBlue Airways Customer Bill of Rights” to show its “official commitment to you of how we will handle operational interruptions going forward, including details of compensation.” Id.; see also JetBlue Passenger Bill of Rights. Some have speculated that JetBlue’s profuse apology may have helped reduce the number of lawsuits filed in response to the incident.
Apologies, however, can be a gamble, depending on the facts and circumstances. While many states’ “apology laws” exclude from evidence a healthcare provider’s expressions of sympathy to a harmed patient, the same statutory protection may not apply to other professionals or industries. See, e.g., Me. Rev. Stat. tit. 24, § 2907 (prohibiting introduction into evidence of “any statement, affirmation, gesture or conduct expressing apology, sympathy, commiseration, condolence, compassion or a general sense of benevolence that is made by a health care practitioner or health care provider”). Whether a pre-litigation apology is viable or advisable depends on the facts of the case and the law of the jurisdiction.
At bottom, the goal is to quell the anger and assume responsibility, where doing so is appropriate and legally sound. Being proactive and directly addressing those impacted from the outset can substantially improve a company’s prospect of avoiding litigation.
When litigation becomes inevitable, companies should assess their position and the impact anti-corporate bias may have on their case. There are a variety of steps a company can take to do this, ranging from informal focus groups to hired case-strategy consultants and to full-blown mock trials. The right approach depends on the facts of the case, the nature of the allegations, and the financial means of the corporation. Regardless of the approach, however, the goal is the same: understanding the strengths and weaknesses of your case, including which facts and issues are likely to be most salient to the fact finder.
Engaging these types of consultants early enables lawyers (and their clients) to determine how much time they may need to spend dealing with the “noise” that constitutes anti-corporate bias. Tammy Worth, “Lawyers work hard to overcome jury bias against corporate clients,” Columbus Bus. First, Apr. 16, 2007. For financial institutions facing multimillion- or even billion-dollar claims, a realistic case assessment can also help persuade management to settle the case early.
Once the litigation train has left the station and a jury trial is inevitable, there are several ways to combat anti-corporate bias.
Voir dire is an excellent opportunity to discover potential jurors’ latent and not-so-latent anti-corporate bias. Lawyers must ask difficult questions that may reveal unspoken prejudice, while remaining respectful. It is important to thoroughly vet prospective jurors’ past experiences with banks. For example, during voir dire, lawyers should consider asking (a) whether prospective jurors, or their families, have been employed by a bank or lending institution; (b) whether they have applied for a loan with a bank or lending institution, the nature of the loan, and what the experience was like; and (c) whether they have any experience with foreclosure proceedings. 44 Am. Jur. Trials 613, § 53, Defense of Lender Liability Litigation; Written voir dire questions; form.
In addition, lawyers should use voir dire to address any current events that may exacerbate the anti-corporate bias based on the facts of the case. Effective and thorough voir dire can help litigants spend more time addressing the merits of the case and can minimize the amount of time lawyers must spend addressing the background noise of generalized anti-corporate bias.
Strategically narrowing the scope of the dispute throughout the pretrial stages of litigation can also help limit the impact of anti-corporate bias and keep jury deliberations focused on the issues before the jury. From this perspective, aggressive and laser-focused motions to dismiss, motions for summary judgment, and motions in limine to exclude inadmissible or improper evidence can be used to limit the plaintiff’s opportunities to evoke possible anti-corporate bias.
It can be difficult for jurors to identify with companies and the decision makers who are the typical defense witnesses at trial. Many jurors feel that corporations have more resources and power than individual citizens, and that CEOs making 500 times the salary of the average hourly worker do not live in the same reality or play by the same rules as most jurors. See Persuasion Strategies, supra, at 7. However, while it is easy to despise a large, amorphous corporation, it is much harder to dislike an individual person. When appropriate for the given circumstances of a case, lawyers should consider putting the corporate executive or leaders on the witness stand to testify before the jury, to help humanize the client.
This can be a complicated decision. On the one hand, corporate executives—and especially those in the C-suite—may know less about the day-to-day activities of their companies than the mid-level managers. On the other hand, jurors consistently feel that these executives should know about the goings-on in their companies, and so jurors may deem their absence conspicuous. Gerald A. Klein, “The CEO as Witness: Super Hero or Arch Villain,” ABTL Rep., Summer 2005. Further, it can be difficult for executives to commit to participating in a long, drawn-out trial, where the exact dates and times for their testimony are unknown. Yet, jurors do not generally view the middle managers as the “face” of the company in the same way. Thus, the fact that middle managers may be more available and, oftentimes, more “in the know” does not necessarily make them the most effective witnesses for combatting anti-corporate bias.
Lawyers should spend time preparing their clients’ corporate executives to testify in depositions and at trial, to ensure that these individuals present a sympathetic and authentic presence. For any corporate representative—but especially those at the top—it is important that lawyers emphasize the need for honest, straightforward, non-defensive answers to questions, which explain in layman’s terms why they do what they do. Worth, supra.
Demonstrating that company personnel are accountable and responsible in response to issues or concerns can soothe jurors’ anti-corporate bias. Specifically, it can help for jurors to hear actual employees and executives from the company express sympathy, regret, or even just a recognition that something went wrong—even without admitting fault. Jurors, like most people, want individuals and entities to take responsibility and be held accountable.
At the end of the trial, after taking every opportunity to combat anti-corporate bias with honest and straightforward testimony and meaningful accountability, the last thing a corporate defense lawyer can do to promote a fair and impartial deliberation that is devoid of (most) anti-corporate bias is to call it out by name—i.e., propose a specific jury instruction.
For example, the Eleventh Circuit Court of Appeals provides the following pattern instruction for cases involving a corporation as a party:
3.2.2 The Duty to Follow Instructions—Corporate Party Involved
Your decision must be based only on the evidence presented here. You must not be influenced in any way by either sympathy for or prejudice against anyone. You must follow the law as I explain it—even if you do not agree with the law—and you must follow all of my instructions as a whole. You must not single out or disregard any of the instructions on the law. The fact that a corporation is involved as a party must not affect your decision in any way. A corporation and all other persons stand equal before the law and must be dealt with as equals in a court of justice. When a corporation is involved, of course, it may act only through people as its employees; and, in general, a corporation is responsible under the law for the acts and statements of its employees that are made within the scope of their duties as employees of the company.
Judicial Council of the United States Eleventh Judicial Circuit, Committee on Pattern Jury Instructions (2013 revision), Pattern Jury Instructions (Civil Cases) 3.2.2—The Duty to Follow Instructions—Corporate Party Involved. A simpler, shorter version of the instruction might read:
Do not let bias, prejudice or sympathy play any part in your deliberations. A corporation and all other persons are equal before the law and must be treated as equals in a court of justice.
O’Malley, Grenig & Lee, Fed. Jury Prac. and Instructions, Civil Comp HB § 6:1.
Because the impact of anti-corporate bias is sufficiently well established, some courts have found reversible error where a plaintiff’s lawyers have improperly encouraged the jurors to consider the corporate defendant’s wealth, its status as a foreign entity, and the plaintiff’s need for a substantial verdict in his or her favor. See Foster v. Crawford Shipping Co., 496 F.2d 788 (3d Cir. 1974) (reversible error where plaintiff’s counsel emphasized that the corporation was foreign, that it had substantial assets, and that the plaintiff would be a ward of the state if no award was made); but see Strickland v. Owens Corning, 142 F.3d 353, 358–59 (6th Cir. 1998) (finding no plain error where plaintiff’s counsel made inflammatory remarks during closing argument meant to foster anti-corporate bias and wrongfully implied that the jury could award punitive damages). This supports the importance of identifying and advocating for a corporate-bias instruction to preserve these issues on appeal.
Anti-corporate bias is a fact of life for corporate defendants—particularly banks and other financial institutions. However, it need not present an insurmountable obstacle in a jury trial. While anti-corporate bias may increase the odds of a plaintiff’s verdict or a higher verdict amount, financial institutions can take steps to limit that risk.
Long before litigation or disputes arise, banks and financial institutions can build a culture of transparency and accountability, and they can be vocal about their commitments to ethical and moral issues of the day. When faced with allegations of misconduct or scandal, banks should avoid blaming hourly employees and should instead assume responsibility, where appropriate, without admitting fault or liability.
Once litigation is under way, banks and financial institutions should work hard to gain a realistic understanding of their case and the facts that are likely to be most salient to the jurors—including those facts that are top of mind due to news stories or social movements. Tools like effective voir dire and thorough witness preparation can go a long way toward taking the wind out of the anti-corporate sails. Last, lawyers representing banks and financial institutions can combat jurors’ tendency to impose higher standards on corporations by calling out these issues in clear, concise jury instructions.
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